US President Donald Trump said he will lower his tariff rates on imports of Chinese goods to 47% after meeting with Chinese counterpart Xi Jinping in Busan, South Korea on Thursday.
Trump also announced that the meeting yielded an extendable one-year deal on the supply of crucial rare earths as the meeting set the stage for the leaders of the world’s two largest economies to stabilize relations after months of turmoil over trade issues.
"All the rare earths has been settled, and that's for the world," Trump told reporters aboard Air Force One, adding that the deal was for a year and would be re-negotiated annually.
Trump's aggressive use of tariffs since returning to the White House for a second term combined with China's retaliatory limits on exports of rare earth elements gave the meeting newfound urgency. There is a mutual recognition that neither side wants to risk blowing up the world economy in ways that could jeopardize their own country's fortunes.
The meeting lasted a little over 100 minutes, with the two leaders shaking hands and Trump appearing to say something into Xi’s ear. However, neither leader made any public comments immediately after the talks.
Trump headed straight to Air Force One, waving and pumping his fist as he boarded the plane. The jet took off minutes later. Xi was seen getting into his limousine outside the closed-door meeting.
Trump says 'going' to China in April
On board the Air Force One, Trump told reporters he decided to reduce the combined rate from 57% after successful talks that included promises by Xi to curb shipments of fentanyl ingredients to the US. That brings the total combined tariff rate on China down from 57% to 47%
“I guess on the scale from 0 to 10, with ten being the best, I would say the meeting was a 12,” Trump said. “I think it was a 12.”
Trump described his meeting as a "great success" and said he would head to China in April for new talks. "I'll be going to China in April and he'll be coming here sometime after that, whether it's in Florida, Palm Beach or Washington, DC," Trump told reporters.
"A lot of things we brought to finalisation" at Thursday's talks in Busan, South Korea, added Trump, praising Xi as a "tremendous leader of a very powerful country."
Trump also added that China had agreed to buy "tremendous amounts" of soybeans and other farming products. "We're in agreement on so many elements... tremendous amounts of soybeans and other farm products are going to be purchased immediately," he said.
Ahead of the meeting, Trump threatened a huge hike that would have boosted tariffs by 100%, but he told reporters he didn’t need to go through with that plan. China did not provide immediate comment on the meeting or any outcomes.
Meanwhile, Xi acknowledged before the meeting began in earnest that both sides did not always see eye to eye, but should strive to be "partners and friends."
"China and the US can jointly shoulder our responsibility as major countries and work together to accomplish more great and concrete things for the good of our two countries and the whole world," said Xi.
Sitting opposite each other, each leader was flanked by senior officials including Secretary of State Marco Rubio, Treasury chief Scott Bessent and Commerce Secretary Howard Lutnick.
Xi's team, which arrived from Beijing shortly before -- the US side was already in South Korea -- included Foreign Minister Wang Yi, Commerce Minister Wang Wentao and Vice Premier He Lifeng.
Sources of tension remain
Despite Trump’s optimism after a 100-minute meeting with Xi in South Korea, there continues to be the potential for major tensions between the world’s two largest economies. Both nations are seeking dominant places in manufacturing, developing emerging technologies such as artificial intelligence, and shaping world affairs like Russia’s war in Ukraine.
Trump’s aggressive use of tariffs since returning to the White House for a second term, combined with China’s retaliatory limits on exports of rare earth elements, gave the meeting newfound urgency. There is a mutual recognition that neither side wants to risk blowing up the world economy in ways that could jeopardize their own country’s fortunes.
When the two were seated at the start of the meeting, Xi read prepared remarks that stressed a willingness to work together despite differences.
“Given our different national conditions, we do not always see eye to eye with each other,” he said through a translator. “It is normal for the two leading economies of the world to have frictions now and then.”
There was a slight difference in translation as China’s Xinhua News Agency reported Xi as telling Trump that having some differences is inevitable.
China did not provide immediate comment on the meeting or any outcomes.
Finding ways to lower the temperature
The leaders met in Busan, South Korea, a port city about 76 kilometers (47 miles) south from Gyeongju, the main venue for the Asia-Pacific Economic Cooperation summit.
In the days leading up to the meeting, US officials signaled that Trump did not intend to make good on a recent threat to impose an additional 100% import tax on Chinese goods, and China showed signs it was willing to relax its export controls on rare earths and also buy soybeans from America.
Officials from both countries met earlier this week in Kuala Lumpur to lay the groundwork for their leaders. Afterward, China’s top trade negotiator Li Chenggang said they had reached a “preliminary consensus,” a statement affirmed by US Treasury Secretary Scott Bessent who said there was “ a very successful framework."
Shortly before the meeting on Thursday, Trump posted on Truth Social that the meeting would be the “G2,” a recognition of America and China’s status as the world’s biggest economies. The Group of Seven and Group of 20 are other forums of industrialized nations.
But while those summits often happen at luxury spaces, this meeting took place in humbler surroundings: Trump and Xi met in a small gray building with a blue roof on a military base adjacent to Busan’s international airport.
The anticipated detente has given investors and businesses caught between the two nations a sense of relief. The US stock market has climbed on the hopes of a trade framework coming out of the meeting.
Pressure points remain for both US and China
Trump has outward confidence that the grounds for a deal are in place, but previous negotiations with China this year in Geneva, Switzerland and London had a start-stop quality to them. The initial promise of progress has repeatedly given way to both countries seeking a better position against the other.
“The proposed deal on the table fits the pattern we’ve seen all year: short-term stabilization dressed up as strategic progress," said Craig Singleton, senior director of the China program at the Foundation for Defense of Democracies. “Both sides are managing volatility, calibrating just enough cooperation to avert crisis while the deeper rivalry endures.”
The US and China have each shown they believe they have levers to pressure the other, and the past year has demonstrated that tentative steps forward can be short-lived.
For Trump, that pressure comes from tariffs.
China had faced new tariffs this year totaling 30%, of which 20% were tied to its role in fentanyl production. But the tariff rates have been volatile. In April, he announced plans to jack the rate on Chinese goods to 145%, only to abandon those plans as markets recoiled.
Then, on Oct. 10, Trump threatened a 100% import tax because of China's rare earth restrictions. That figure, including past tariffs, would now be 47% “effective immediately,” Trump told reporters on Thursday.
Xi has his own chokehold on the world economy because China is the top producer and processor of the rare earth minerals needed to make fighter jets, robots, electric vehicles and other high-tech products.
China had tightened export restrictions on Oct. 9, repeating a cycle in which each nation jockeys for an edge only to back down after more trade talks.
What might also matter is what happens directly after their talks. Trump plans to return to Washington, while Xi plans to stay on in South Korea to meet with regional leaders during the Asia-Pacific Economic Cooperation summit, which officially begins on Friday.
“Xi sees an opportunity to position China as a reliable partner and bolster bilateral and multilateral relations with countries frustrated by the US administration’s tariff policy,” said Jay Truesdale, a former State Department official who is CEO of TD International, a risk and intelligence advisory firm.
